The Homeless Hole That Ate Los Angeles

The homeless are everywhere in the City of Angels. The retail strip of any neighborhood, no matter how glitzy, will host at least one wandering schizophrenic cursing random pedestrians and the sky. Colorful tent cities grow in the shade of blighted overpasses like poisonous mushrooms. There are homeless encampments on the lawn at City Hall across from the LAPD HQ. Near Venice Beach, the smell of ordure can be overpowering, and last year the befouling of public streets led to a Hepatitis A outbreak. The hard rain that’s falling isn’t coming from the cloudless sky: it’s streets being power washed with bleach.

Walk down a street in the trendier parts of Los Angeles and you’re more likely to spot marijuana dispensaries than churches. The ubiquitous green cross is everywhere. Its faithful believe in only one higher power that they can’t smoke. So as the homeless problem grew, they turned to government.

And to higher taxes.

Proposition HHH was going to solve the homeless crisis by hiking property taxes to raise $1.2 billion. The money would be used to build housing for the homeless. $1.2 billion could house all the homeless.

Couldn’t it? If it couldn’t, it was part of a $4.6 billion package of homeless tax hikes. There was Proposition H which added to the already hefty sales tax. Los Angeles voters backed that one too.

But instead the number of homeless increased faster than the supply of homeless housing. By ’18, the number of homeless was up to 58,000 from 32,000 in 6 years. Increasing subsidies to the homeless only increased their number. As usual, government social welfare was generating more of the problem.

And, even more predictably, no amount of social services spending was ever enough. The annual shortfall was estimated this year at $270 million. The new projected cost hovers at $628 million.

The Measure H sales tax wasn’t supposed to run a deficit (but like every government program ever, it was bound to) until the fourth year when costs would exceed revenue (necessitating more tax hikes.)

But the tax and spend holiday came early instead because government excels at spending money.

The homeless housing being approved costs an average at $479,000 per unit. Two run at $650,000.

That’s not homeless housing: it’s homeless luxury condos. And it’s being paid for by the same middle class that is being squeezed out of Los Angeles by the coalition of Democrat politicos and lefty activists.

Why is “affordable housing” so unaffordable? One reason is that, as usual, it’s also kickbacks to a variety of special interest groups. If you want incentives for building affordable housing, you have to pay union wages. And that raises costs by 30% making building affordable housing… unaffordable to actually build.

The linkage fee, due in 2019, is the latest brilliant plan to solve the housing crisis by taxing housing. The $100 million it raises will go into the same gaping hole where shortfalls twice as high as that just vanish.

The $4 billion bond in 2018 is just more money leaking into an unpluggable money hole.

Government regulations raise the cost of housing so that only luxury condos are profitable. And then tax the luxury condos to build affordable housing which end up costing luxury condo prices. The middle class flees a city and state where it can’t afford to buy a house. And after tax reform’s impact on the wealthy in high tax states, the exodus of those who have been subsidizing this is also underway.